How to Identify a Credit Repair Scam
Published September 5, 2013 | Updated June 1, 2015
You've probably seen the online ads or TV commercials that say:
"Credit Repair Services - We can remove bankruptcies, judgments, and liens from your credit file!"
"We can erase your bad credit - 100% guaranteed!"
"Create a new credit identity - legally."
The fact is that there is no way to remove information that is accurate from your credit report. The Federal Trade Commission receives hundreds of complaints each year from consumers who have paid one of these so-called “Credit Repair Companies” and, in return, have lost their money and gained nothing.
Signs a Credit Repair Company is Probably a Scam
- The company wants you to pay for credit repair services upfront. However, credit repair companies cannot and should not require payment until they have completed the services promised.
- The company does not inform you of your legal rights and actions you can take yourself to improve your credit.
- The company advises against contacting a credit reporting company directly.
- The company suggests that create a “new” credit identity and new credit report by applying for an Employer Identification Number to use instead of your Social Security number.
- The company advises you to dispute accurate information in your credit report or take action that seems illegal, like creating a new credit identity.
There are steps you can take to improve your credit, but the process takes time. Amplify offers complimentary credit report analysis for its members. We will walk you through items on your credit report and suggest actions you can take to improve your credit. You might also consider working with a reputable credit counselor who can assist you by working out repayment agreements with your creditors if you are behind.
Most credit counselors offer services through local offices, online, or on the phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. The U.S. Department of Justice maintains a state-by-state list of approved credit counseling agencies at The Department of Justice website.
If your credit report includes inaccurate information, you can ask for an investigation. The FTC website includes a sample letter you can use to request an investigation by a credit reporting agency. The site also has sample letters for you to use to contact the creditor which is reporting the inaccurate information. By law, if the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if the information is found to be inaccurate, the provider may not report it again.